Federal Student Aid - IFAP
   
DCLPublicationDate: 8/1/98
DCLID: 98-L-209
AwardYear:
Summary: Guidance on the extension of eligibility for increased unsubsidized loan amounts due to the phaseout of the Health Education Assistance Loan (HEAL) Program and information on aggregate limits for undergraduate health professions students.


August 1998

GEN-98-18
98-G-311
98-L-209


Summary: Guidance on the extension of eligibility for increased unsubsidized loan amounts due to the phaseout of the Health Education Assistance Loan (HEAL) Program and information on aggregate limits for undergraduate health professions students.

References: Dear Colleague Letters GEN-96-14, GEN-97-4, and GEN-97-14
1998-99 Federal Student Financial Aid Handbook - Chapter 10, Page 30 and Chapter 11, Page 18

Dear Colleague:

Consistent with its commitment to assist health professions students who cannot borrow under the Health Education Assistance Loan (HEAL) Program because of the phaseout of that program, the Department is extending the authority of certain eligible institutions (see discussion on "Institutional Eligibility" below) to award increased annual loan amounts of Unsubsidized Stafford Loans under the Federal Family Education Loan (FFEL) Program and Unsubsidized Loans under the William D. Ford Federal Direct Loan (Direct Loan) Program into the 1998-99 academic year. In addition, for reasons discussed below under "Expanded Student Eligibility," eligible schools may award these increased funds to all otherwise eligible health professions students without regard to those students' earlier eligibility for HEAL. Finally, the Department has established aggregate loan limits for pharmacy undergraduate students who are eligible to receive additional unsubsidized loans under the provisions of this letter.

In summary:

(1) General Extension - Eligible institutions may award increased amounts of unsubsidized loans in the FFEL and Direct Loan Programs for any loan period that begins prior to July 1, 1999.

(2) Eligible Students - For loan periods that begin on or after May 15, 1998, institutions may award the increased amounts to all otherwise eligible health professions students without regard to those students' earlier eligibility for HEAL.

(3) Loan Limits - The aggregate unsubsidized loan limit for those undergraduate pharmacy students who are eligible to receive increased amounts of unsubsidized loans is $70,625, less the aggregate amount of any subsidized loans made to the student.


Other restrictions and requirements for the awarding of the additional unsubsidized loan funds are the same as those for the prior two years. Although these restrictions and requirements are discussed in summary below, we urge you to review the Dear Colleague Letters (DCLs) noted above.

Expanded Student Eligibility

Consistent with the terms of the HEAL phaseout, students who had previously received HEAL Program loans remained eligible for HEAL and therefore were not eligible for increased unsubsidized amounts under the FFEL or Direct Loan Program. However, the budgetary plan for the phaseout of HEAL included insurance authority (funding levels) only through Federal Fiscal Year 1998 (FY 98), which ends on September 30, 1998. In addition, the Department of Health and Human Services (HHS) has informed us that most, if not all, of the insurance authority for FY 98 has been used, even though the fiscal year does not end until September 30, 1998. Therefore, many health professions students who previously participated in HEAL will not be able to receive HEAL Program loans for the 1998-99 academic year.

In order to ensure the availability of loan funds for these students a change is being made in the student eligibility requirements for the receipt of additional unsubsidized loans under the FFEL and Direct Loan Programs. For loan periods beginning on or after May 15, 1998, eligible schools (see discussion below) may award the increased amount of unsubsidized loans to all otherwise eligible health professions students, even if those students had previously participated in the HEAL Program. However, no students may receive the additional unsubsidized funding under the Department's loan programs if they are also receiving funding under HEAL for the same, or any portion of the same, loan period.

As a reminder, and consistent with Title IV requirements, a dependent undergraduate health professions student may receive the increased amounts of unsubsidized loans only if the student's parent is unable to borrow a PLUS loan. Also, unlike HEAL, there is no need analysis test required for these additional amounts.


Institutional Eligibility

To award unsubsidized loans in excess of current maximums, a school must have made disbursements of HEAL Program loans during FY 95 and not have withdrawn from the HEAL Program since that time. The increased unsubsidized loan limits are intended to assist health professions students who are ineligible for HEAL Program loans solely because of the budgetary restrictions placed on that program. If a school did not participate in HEAL during FY 95, or has withdrawn from HEAL participation since FY 95, its students are not eligible for HEAL because of that action and not because of the phaseout.

Annual Loan Limits

When determining the amount of additional unsubsidized loans an eligible student may receive, schools must use the current HEAL Program and Discipline loan limits as provided in Section 703(a) of the Public Health Act and as described in the Department of Health and Human Services' Student Financial Aid Guidelines Notebook at Section 104.3.2. The additional unsubsidized loan amount an eligible student may receive because of the phaseout of HEAL is in addition to any unsubsidized loan eligibility the student would have under the FFEL and Direct Loan Programs (see DCL GEN-97-4 and GEN 97-14).


Aggregate Loan Limits

Graduate & Professional

As announced in Dear Colleague Letter GEN-97-14, the aggregate loan limit for unsubsidized loans for graduate and professional health professions students who are eligible to receive additional unsubsidized loan amounts is $189,125, less the aggregate amount of any subsidized loans made to the student.

Undergraduate

The only undergraduate program that has been eligible for HEAL Program loans is the five-year Bachelor of Pharmacology program. The Department is establishing an aggregate unsubsidized loan limit of $70,625, less the aggregate amount of any subsidized loans made to the student, for those undergraduate pharmacy students who are eligible to receive increased amounts of unsubsidized loans because of the phaseout of HEAL. This amount was calculated by using the annual maximums of $6,625 for the first year of undergraduate study, $7,500 for the second year, $10,500 for the third, fourth, and fifth years, and an additional $12,500 (the maximum HEAL Program loan limit for such a student for a 9-month academic year) in increased unsubsidized eligibility for the fourth and fifth years (the two years of eligibility that are available under the HEAL Program for pharmacy undergraduate students).

The Department appreciates your patience and cooperation as we provide guidance and implement policies to help health professions students who are affected by the HEAL phaseout.

Sincerely,


Diane E. Rogers
Acting Deputy Assistant Secretary
Student Financial Assistance Programs